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Any option you have results in paying off the loan. Whether that is by trade, private party sale, or payoff. Given the market trend, you probably won't get what was paid for it.

Your interest calculation. It's just wrong. The 6.94 rate is per year. On a monthly basis you have around .55% of the load balance added to the remaining principal to find the interest accrued.

You end up paying that much in dealer markup (pure profit over MSRP), add on packages, service contracts, plus fees as you mention. You get to this point by not knowing what was being signed and being sold a bunch of things they probably didn't need.

> Many states have a 10-15 day cool down period that lets buyers return cars and essentially cancel the deal

That is not really true. If you happen to have a link to a source that says otherwise, I would definitely be interested in seeing it.

>Basically, how do these numbers fit together?

6.94% APR means that every month, 0.58% (6.94% / 12 months) of her current balance gets added to how much she owes. Those numbers come from assuming she keeps that going while making only the minimum required payments.

>I don't have much experience with car loans

This is how nearly all debt works, from credit cards to mortgages.

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Thanks for your answer!

1. It looks like she bought it Oct 28, 2022, so it seems we’re past the cooldown. I know she tried going back to the dealership and the refused to take it back. This is in NY state.

2. Thanks, I see how it calculated now. And I do see the monthly payment amount and number of payments.

3. So this is a normal price to pay? Or is my aunt just bad at negotiating?

>Many states have a 10-15 day cool down period that lets buyers return cars and essentially cancel the deal

People need to stop posting this garbage. There are very few or no states that have a cooling off period for a vehicle.

Interest is applied daily, it's not simply Sale price X interest rate so that's why the total cost is not what you expect. As far as getting rid of it you can see if your state has a cool down period or if the dealer has their own. If not then you can see what the dealer can do for you in terms of a buyback/trade-in but private sale will probably net you the most

Your aunt got ripped off because she’s 70 years old and elderly people are easy targets. Get rid of the car, buy something older and cheaper. No shot she’s gonna be driving enough over the next 7+ years to justify a brand new car, and clearly she doesn’t have the love of cars or financial means to justify it.

Thanks for your answer!

Definitely not expecting to get what was paid for it. Just minimizing losses.

Understood regarding the interest calculation being yearly and based on the principal decreasing.

Yeah, pretty sure my aunt didn’t read into what she was buying closely enough. Wish she had.

Thanks, this helps. I guess I should say I don’t have experience with loans in general, but I do remember learning about this in school a long time ago, so this was a good reminder of how it all works.

Thanks for answering.

So am I fair in assuming she could have gotten a more competitive price (not necessarily MSRP, but at least close to it)?

She actually drives quite a lot. Still pretty active. My assumption is that the newer electronics in the car are throwing her off (specifically the non-mechanic key). Perhaps I can help her learn about them.

Thanks for your answer!

The 54k sales price is nuts. Guessing she got various insurance (tire and wheel gap etc) add ons? Paint protection products maybe? What does her financing paperwork show?

I’m seeing Service Contract for $2,995, Maintenance for $1,020, and Road Hazard for $1,479. Are any of these even worthwhile?

She got taken advantage of sadly :(

This is absolutely not an appropriate cost for the car she purchased.

Dealerships add bunch of random extra crap: add ons, questionable(usually unnecessary) warranties, service packages etc, to the sale of the car, thus inflating the price of the car. Then they tack on the APR on top of all this stuff they added. You really have to go through the list one by one to see what you are buying otherwise they will easily rob thousands of dollars off of you.

I hope this will help you make informed decision in the future in case you find yourself in the market for a new car. Dealership people are not your friend.

The Honda service contracts are a pain to work with… whe she wants an oil change, etc she has to ask for exactly the right service otherwise it won’t get applied. Sounds like they loaded her with every upsell they could think of and then she financed it, I’m guessing for 84 months?

She got screwed. Only way I’ll buy a new car these days is directly off the delivery truck: no dealer tint, add ons, no extra anything.

Yes, 84 months. I assume this means she needs to bring in her car to a Honda dealership for servicing/maintenance (didn’t realize there was a difference between these two). I’m betting she’s not aware of this. Thanks for bringing it to my attention

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Yep, and to get the value out of the service contract, she’ll need to make them aware of the contract. Don’t assume they’ll figure it out on their own and apply it correctly.

Definitely a lesson for the future. Hopefully my aunt will call me before she signs next time!

Good to know. I’ll be sure to make her aware of this!

There is no link, it's not true. Just imagine if you could buy a BRAND NEW vehicle, drive it for 10-15 days, change your mind, and return a USED vehicle.

You didnt say the length of loan. But six years 7% APY is 50% added to the amount financed.

I don’t know where you live but chances are a lot of the add-ons she undoubtedly purchased like tire and wheel coverage, service plans, warranties etc can be cancelled/refunded (prorated to how long she’s owned the car of course). Look at the contracts for information on how to cancel them. And expect it to be kind of a PITA and for the people at the dealer to try to talk her out of it.

Great advice, thank you

Lol, yeah I know...I just like to challenge people when they post myths like that.